Do the Michael Saylors and the Matthew Kratters of the world prefer to rent for life or pay the mortgage on the house?
Here are some assumptions for my scenario:
- 24 years old (let's assume 25)
- If life expectancy is 75, I have ~50 years left to live which is about ~600 months
- United States
- Bitcoin is the ultimate asset in which all other assets will bleed against (including real estate) (bitcoin maxi mindset)
- For a $1,000,000 home, 20% down payment = $200,000
- Current mortgage interest rate = 7%
- Planning on no wife and kids forever = Planning to "die with zero" (spending all assets and die with as close to zero as possible; will not pass down any assets, any assets unspent will be wasted)
| Rent Forever | Buy the House | |
|---|---|---|
| Pros | - No maintenance or repairs (HVAC, plumber, electrician, roof, mowing lawns, shoveling driveways) | - 5x Leverage with a 20% down payment ($200k down to control a $1,000,000 asset; 5% appreciation of house = 25% appreciation) |
| - Flexible to move around (so many cities, so little time) | - No landlord | |
| - Freedom to invest $200,000 into BTC instead of down payment (4 bitcoins @ 50k/btc or 2 bitcoins @ 100k/btc) | - 30 year fixed (mortgage payment stays the same for 30 years) | |
| - SP500 has historically significantly outperformed housing appreciation (housing since 1967 has appreciated 940%, SP500 since 1967 has appreciated 26,000%) | - Can borrow against the asset | |
| - Tax advantages | ||
| - Can refinance 7% interest rate | ||
| - 360 months of mortgage instead of 600 months rent | ||
| Cons | - Monthly rent payment is gone instead of building equity (1.2 million of today's value gone over the 600 month period) | - Must obey HOA |
| - Close neighbors (can you rent a house to prevent this?) | - Must comply with IRS + government or else property gets seized even if fully paid off | |
| - Must obey landlord | - Not portable | |
| - Rent increases with inflation | - Opportunity cost of having money in home equity instead of BTC | |
| - 600 months of rent instead of 360 mortgage payments | - Will not be able to take paid off house to the grave | |
| - Tax laws can change to eventually tax owners out of their property |
[link] [comments]
You can get bonuses upto $100 FREE BONUS when you:
π° Install these recommended apps:
π² SocialGood - 100% Crypto Back on Everyday Shopping
π² xPortal - The DeFi For The Next Billion
π² CryptoTab Browser - Lightweight, fast, and ready to mine!
π° Register on these recommended exchanges:
π‘ Binanceπ‘ Bitfinexπ‘ Bitmartπ‘ Bittrexπ‘ Bitget
π‘ CoinExπ‘ Crypto.comπ‘ Gate.ioπ‘ Huobiπ‘ Kucoin.
Comments